September 10th, 2015
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, commonly known as ACA. The US Supreme Court upheld this decision on June 28, 2012, by saying that the individual mandate is an exercise of Congress’ taxing power.
The ACA has had an effect on many industries, especially the Hospitality and Staffing industries. The hospitality industry employs millions of people all over the country, and many of these places rely on seasonal employees. For example, there are many resort areas, which are in business for only a few months of the year (I.E. ski resorts, beach towns). These businesses are now coming into conflict with the ACA, mostly with their definition of a “Full-time employee.”
According to the official IRS website, a full-time employee is defined as, “For purposes of the employer shared responsibility provisions, a full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.”
The Hospitality industry must track full time and seasonal employees, with the added complexity of shift employees, specialized staff, and foreign employees. Some organizations may have employees who work at multiple locations, complicating hourly tracking
Staffing agencies struggle to measure eligibility for “candidates”, whether they work long-term or pick up hours here and there. Who should be covered? When are they considered terminated? How do return-to-service rules apply? How do date of hire and start date impact eligibility?
Further explanation of this regulation can be found in section 54.4980H-3 of the ESRP regulations.
Paid Sick Leave
On September 7, 2015, President Obama signed an executive order requiring federal contractors to offer paid sick days to their employees, and has pressed congress to provide family and medical leave to private-sector employees as well. Currently, 40% of employees are in the private-sector, or about 44 million people, do not currently have access to paid sick leave.
This will affect about 300,000 employees of federal contractors.
- Workers earn 1 hour of paid leave for 30 hours worked, which will be up to 7 paid sick days each year.
- It effects federal contractors starting in 2017.
President Obama has claimed that, “Small businesses support these policies because they understand that it is helpful with recruitment and retention of employees.” Obama is hopeful that even though this adds an additional cost to small businesses, that the costs would be offset by improved employee loyalty and efficiency.